Astoria, Oregon, the oldest American settlement on the West Coast, is the first city to raise money on the burgeoning carbon markets. Instead of harvesting trees for timber, Astoria will make money by maintaining its forest.Astoria owns more than 37,000 acres surrounding its watershed, which is more than 10 miles from town. Around the reservoir, the forest is dense with spruce, hemlock and Douglas fir.

But outside the property boundaries, whole hillsides have been reduced to a sea of stumps.

Looking at an aerial map, Astoria’s forester, Mike Barnes, pointed out areas that have been clear-cut. “All this is gone,” he said. “This is gone. Gone, gone, gone.”

Astoria could cut as much as 3 percent of its forest every year. Instead, city leaders decided to cut fewer trees and try something new. “We’re forgoing increased harvests in the future,” Barnes said, “and staying at a low level and monetizing the carbon that we’re sequestering.”

An Oregon law requires power companies to compensate for their emissions. One way is to buy and conserve forests, which absorb carbon from the atmosphere.

In return for protecting some trees for 40 years, Astoria will get $2 million.

Some town leaders remain skeptical.

“I think carbon offsets are kind of silly,” said Russ Warr, a member of Astoria’s city council. He doesn’t believe that protecting the trees will make any difference for the environment.

At the same time, Warr said, he could not pass up the easy revenue. “We’re promising not to log some of it for a whole bunch of money,” he said. “And we weren’t going to log it anyway. So, in my opinion, that’s free money.”

But from the buyer’s perspective, it’s important to lock in Astoria’s low rate of logging.

“They could actually cut a lot more,” said Sheldon Zakreski, the director of risk management at The Climate Trust, which invests Oregon utility money in projects that reduce carbon emissions, such as Astoria’s trees.

He said purchasing the carbon credits “is providing them an incentive not to cut. So, this is actually preventing them from pursuing more aggressive harvesting, which is something they could do.”

The Climate Trust, based in Portland, Oregon, buys carbon offsets around the country, but it prefers to shop in its own backyard.

Zakreski said the deal with Astoria “helps us to keep Oregon dollars and promote real economic development, which we see as a key part of our mission, as well as reducing emissions.”

The potential for economic development has caught the attention of treasurers in other small Oregon towns, who watch Astoria as they consider whether to leverage their own forests for carbon-offset dollars.

Featured in: Marketplace Morning Report for Thursday, November 12, 2015